nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒02‒16
37 papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Factors explaining the spatial agglomeration of the Creative Class – Empirical evidence for German artists By Christoph Alfken; Tom Broekel; Rolf Sternberg
  2. Spatial Frictions By Behrens, Kristian; Mion, Giordano; Murata, Yasusada; Suedekum, Jens
  3. Determinants of cross-regional R and D collaboration networks: an application of exponential random graph models By Tom Broekel; Matte Hartog
  4. Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach By Matthias Brachert; Asier Alexander Kubis; Mirko Titze
  5. Geospatial Analysis of Income Growth in Southeastern United States By Gyawali, Buddhi Raj; Banerjee, Swagata (Ban)
  6. Regionalization vs. Globalization By Hideaki Hirata; M. Ayhan Kose; Christopher Otrok
  7. Automobile and Motorcycle Traffic on Indonesian National Roads: Is It Local or Beyond the City Boundary? By Firman Permana Wandani; Yuichiro Yoshida
  8. Place Based Policies with Unemployment By Kline, Patrick; Moretti, Enrico
  9. Task Specialization in U.S. Cities from 1880-2000 By Guy Michaels; Ferdinand Rauch; Stephen J. Redding
  10. Urban Productivity: Who Benefits from Agglomeration Economies? By Brown, W. Mark<br /> Rigby, David
  11. Localized knowledge spillovers and patent citations: A distance-based approach (revised version) By Yasusada Murata; Ryo Nakajima; Ryosuke Okamoto; Ryuichi Tamura
  12. CDS spreads and systemic risk: A spatial econometric approach By Keiler, Sebastian; Eder, Armin
  13. Micro-dynamics of knowledge: actors, processes and territorial organization By Simone Strambach
  14. Geographic Concentration of Foreign Visitors to Japan By TANAKA Ayumu
  15. A Non-Spatial Analysis of the Role of Residential Real Estate Investment in the Economic Development of the Northeast Region of the United States By Jayaraman, Praveena; Gebremedhin, Tesfa G.
  16. Does social capital matter for European regional growth? By Jesús Peiró-Palomino; Anabel Forte Deltell
  17. A Note on the Extent of US Regional Income Convergence By Mark J. Holmes; Jesús Otero; Theodore Panagiotidis
  18. Universities, Public Research and Regional Innovation Output: An Empirical Study of 19 Technologies in Germany By Thomas Brenner; Charlotte Schlump
  19. Do Banks Price Discriminate Spatially? Evidence from Small Business Lending in Local Credit Markets By Andrea Bellucci; Alexander V. Borisov; Alberto Zazzaro
  20. Policy induced innovation networks: the case of the German "Leading-Edge Cluster competition" By Uwe Cantner; Holger Graf; Susanne Hinzmann
  21. Measuring the Income-Distance Tradeoff for Rural-Urban Migrants in China By Zhang, Junfu; Zhao, Zhong
  22. Measuring the Effect of Green Space on Property Value: An Application of the Hedonic Spatial Quantile Regression By Liu, Sezhu; Hite, Diane
  23. Geography and Intra-National Home Bias: U.S. Domestic Trade in 1949 and 2007 By Crafts, Nicholas; Klein, Alexander
  24. What Influences a Student to Attend a Regionally Isolated University? By Monroe, A. Dean, Jr.; Howry, Sierra S.
  25. On Discrete Location Choice Models By Nils Herger
  26. Size Distributions for All Cities: Which One is Best? By González-Val, Rafael; Ramos, Arturo; Sanz, Fernando; Vera-Cabello, María
  27. Attracting Talent: Location Choices of Foreign-Born PhDs in the US By Jeffrey Grogger; Gordon H. Hanson
  28. Cluster policy in developing countries By Benner, Maximilian
  29. The Impact of Integrated Pest Management Practices on U.S. National Nursery Industry Annul Sales Revenue: An Application of Smooth Transition Spatial Autoregressive Models By Xu, Wan; Khachatryan, Hayk
  30. Grain Transport on the Mississippi River and Spatial Corn Basis By Li, Shu; Thurman, Walter N.
  31. National Banking's Role in U.S. Industrialization, 1850-1900 By Matthew S. Jaremski
  32. Are Technological Gatekeepers Constraining my Cluster? Unfolding the paradox of gatekeepers resilience across cluster life cycle stages By Jose-Luis Hervas-Oliver; Jose Albors-Garrigos
  33. Remote Collaboration, Absorptive Capacity, and the Innovative Output of High-tech Small Firms By Luca Berchicci; Jeroen P.J. de Jong; Mark Freel
  34. Time Zones Matter: The Impact of Distance and Time Zones on Services Trade By Elisabeth Christen
  35. Impact of Foreign Banks By Stijn Claessens; Neeltje van Horen
  36. Elemente der räumlichen Preistheorie By Klaus Schöler
  37. Productivite urbaine : qui profite des economies d'agglomeration? By Brown, W. Mark<br /> Rigby, David

  1. By: Christoph Alfken (Institue of Economic and Cultural Geography, Leibnitz-University of Hannover); Tom Broekel (Institue of Economic and Cultural Geography, Leibnitz-University of Hannover); Rolf Sternberg (Institue of Economic and Cultural Geography, Leibnitz-University of Hannover)
    Abstract: The paper contributes to the ongoing debate about the relative importance of economic and amenity-related location factors for attracting talents or members of the creative class. While Florida highlights the role of amenities, openness, and tolerance, others instead emphasize the role of regional productions systems, local labour markets and externalities. The paper sheds light on this issue by analysing changes in the spatial distribution of four groups of artists over time: visual artists, performing artists, musicians, and writers. Little evidence is found for amenity-related factors influencing the growth rates of regional artist populations. Moreover, artists are shown to be a heterogeneous group inasmuch as the relative importance of regional factors significantly differs between artist branches.
    Keywords: Artists, bohemians, creative class, spatial dynamics, amenities, agglomeration
    JEL: O31 O18 R12
    Date: 2013–02–08
  2. By: Behrens, Kristian (University of Québec at Montréal); Mion, Giordano (CEP, London School of Economics); Murata, Yasusada (Nihon University); Suedekum, Jens (University of Duisburg-Essen)
    Abstract: The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three different levels: Do spatial frictions matter for the city-size distribution? Do they affect individual city sizes? Do they contribute to the productivity advantage of large cities and the toughness of competition in cities? The short answers are: no; yes; and it depends.
    Keywords: city-size distribution, urban frictions, trade frictions, productivity, markups
    JEL: F12 R12
    Date: 2013–01
  3. By: Tom Broekel (Institue of Economic and Cultural Geography, Leibnitz-University of Hannover); Matte Hartog (Section of Economic Geography, Faculty of Geosciences, Utrecht University)
    Abstract: This study investigates the usefulness of exponential random graph models (ERGM) to analyze the determinants of cross-regional R and D collaboration networks. Using spatial interaction models, most research on R and D collaboration between regions is constrained to focus on determinants at the node level (e.g. R and D activity of a region) and dyad level (e.g. geographical distance between regions). ERGMs represent a new set of network analysis techniques that have been developed in recent years in mathematical sociology. In contrast to spatial interaction models, ERGMs additionally allow considering determinants at the structural network level while still only requiring cross-sectional network data. The usefulness of ERGMs is illustrated by an empirical study on the structure of the cross-regional R and D collaboration network of the German chemical industry. The empirical results confirm the importance of determinants at all three levels. It is shown that in addition to determinants at the node and dyad level, the structural network level determinant “triadic closure†helps in explaining the structure of the network. That is, regions that are indirectly linked to each other are more likely to be directly linked as well.
    Keywords: cross-regional R and D collaboration, exponential random graph models, network
    JEL: R11 O32 D85
    Date: 2013–02–08
  4. By: Matthias Brachert; Asier Alexander Kubis; Mirko Titze
    Abstract: The paper presents estimates for the impact of related variety, unrelated variety and the functions a region performs in the production process on regional employment growth in Germany. We argue that regions benefit from the existence of related activities that facilitate economic development. Thereby the sole reliance of the related and unrelated variety concept on standard industrial classifications (SIC) remains debatable. We offer estimations for establishing that conceptual progress can be made when the focus of analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety and test our hypothesis by the help of spatial panel approach. Our findings suggest that related variety as same as unrelated variety facilitate regional employment growth in Germany. However, the drivers behind these effects do differ. While the positive effect of related variety is driven by high degrees of relatedness in the regional “R&D” and “White-Collar”-functions, the effects of unrelated variety are spurred by “Blue Collar”-functions in this period.
    Date: 2013–01
  5. By: Gyawali, Buddhi Raj; Banerjee, Swagata (Ban)
    Abstract: Income convergence and both endogenous and exogenous factors causing income growth in the southeastern United States were examined by using county level census data between 1980 and 2000. The study found that spatial variations in education, employment, and industries concentrations were strongly related with income convergence in the region.
    Keywords: Agglomeration, BlackBelt, census, clusters, convergence, industries, employment, income, southeastern, spatial, Community/Rural/Urban Development, Food Security and Poverty, O12, O15, R12,
    Date: 2013–02–05
  6. By: Hideaki Hirata (Faculty of Business Administration, Hosei University and Japan Center for Economic Research); M. Ayhan Kose (Research Department, International Monetary Fund); Christopher Otrok (Department of Economics, University of Missouri-Columbia and Federal Reserve Bank of St Louis)
    Abstract: Both global and regional economic linkages have strengthened substantially over the past quarter century. We employ a dynamic factor model to analyze the implications of these linkages for the evolution of global and regional business cycles. Our model allows us to assess the roles played by the global, regional, and country-specific factors in explaining business cycles in a large sample of countries and regions over the period 1960–2010. We find that, since the mid-1980s, the importance of regional factors has increased markedly in explaining business cycles especially in regions that experienced a sharp growth in intra-regional trade and financial flows. By contrast, the relative importance of the global factor has declined over the same period. In short, the recent era of globalization has witnessed the emergence of regional business cycles.
    Keywords: Business cycles; Comovement; Synchronization; Trade linkages; Financial linkages.
    JEL: C11 C32 E32 F41 F42
    Date: 2013–02
  7. By: Firman Permana Wandani (Ministry of Public Works); Yuichiro Yoshida (National Graduate Institute for Policy Studies)
    Abstract: This paper investigates the dimensions of private vehicles’ trips on national roads between neighboring cities in Indonesia using the spatial lag model and the spatial error model approach to reveal the spatial correlations among cities. Private vehicles are defined as privately owned automobiles and motorcycles, and vehicle trips or usage levels are defined in terms of vehicle kilometers traveled (VKT) for both types of private vehicles. The paper finds that motorcycle trips are characteristically local because there is no sign of a spatial correlation with neighboring cities for those trips; by contrast, automobile trips often cross city boundaries, although the models constructed in this study demonstrate only weak spatial correlations among neighboring cities for automobile trips. The models also indicate that the road capacity, gasoline prices, gross domestic regional product per capita, population density, city size, number of public buses, and worker resident density have a significant effect on VKT for both cars and motorcycles. Therefore, these findings suggest that in general, the design of urban transportation policies on national roads could be less complex in Indonesian cities because local solutions may be effective for solving traffic problems in individual cities.
    Date: 2013–02
  8. By: Kline, Patrick (University of California, Berkeley); Moretti, Enrico (University of California, Berkeley)
    Abstract: Many countries have policies aimed at creating jobs in depressed areas with high unemployment rates. In standard spatial equilibrium models with perfectly competitive labor and land markets, local job creation efforts are distortionary. We develop a stylized model of frictional local labor markets with the goal of studying the efficiency of unemployment differences across areas and the potential for place based policies to correct local market failures. Our model builds on the heavily studied Diamond-Mortensen-Pissarides framework, adapted to a local labor market setting with a competitive housing market. The result is a simple search analogue of the classic Roback (1982) model that provides a tractable environment for studying the effects of local job creation efforts. In the model, workers are perfectly mobile and the productivity of worker-firm matches may vary across metropolitan areas. In equilibrium, higher local productivity results in higher nominal wages, higher housing costs, and lower unemployment rates. Although workers can move freely to arbitrage away differences in expected utility across metropolitan areas, equilibrium unemployment rates are not equalized across space. We find that if hiring costs are excessive, firms may post too few vacancies. This problem may be offset via local hiring subsidies of the sort found in many place based policies. The optimal hiring subsidy is city specific in the sense that it depends upon the local productivity level.
    Keywords: spatial equilibrium, cities
    JEL: J6
    Date: 2013–01
  9. By: Guy Michaels; Ferdinand Rauch; Stephen J. Redding
    Abstract: We develop a new methodology for quantifying the tasks undertaken within occupations using 3,000 verbs from around 12,000 occupational descriptions in the Dictionary of Occupational Titles (DOTs). Using micro-data from the United States from 1880-2000, we find an increase in the employment share of interactive occupations within sectors over time that is larger in metro areas than non-metro areas. We provide evidence that this increase in the interactiveness of employment is related to the dissemination of improvements in transport and communication technologies. Our findings highlight a change in the nature of agglomeration over time towards an increased emphasis on human interaction.
    Keywords: Economic development, human interaction, urbanization
    JEL: N92 O18 R12
    Date: 2013–02
  10. By: Brown, W. Mark<br /> Rigby, David
    Abstract: There is abundant evidence that many firms cluster together in space and that there is an association between clustering and productivity. This paper moves beyond identifying the broad effects of clustering and explores how different types of firms benefit from agglomeration. It advances research on agglomeration by showing, first, that not all firms gain to the same degree from co-location and, second, that businesses with different internal capabilities capture different forms of geographical externalities. The empirical analysis focuses on Canadian manufacturing establishments operating over the period from 1989 to 1999.
    Keywords: Manufacturing, Business performance and ownership, Economic accounts, Business ownership, Productivity accounts
    Date: 2013–02–06
  11. By: Yasusada Murata (Advanced Research Institute for the Sciences and Humanities, Nihon University); Ryo Nakajima (Department of Economics, Keio University); Ryosuke Okamoto (National Graduate Institute for Policy Studies); Ryuichi Tamura (Center for Economic Growth Strategy, Yokohama National University)
    Abstract: We develop a new distance-based test of localized knowledge spillovers that embeds the concept of control patents. Using microgeographic data, we identify localization distance for each technology class while allowing for spillovers across geographic units. We revisit the debate by Thompson and Fox-Kean (2005a,b) and Henderson, Jaffe and Trajtenberg (2005) on the existence of localized knowledge spillovers, and find solid evidence supporting localization even when using fine-grained controls. We further relax the assumption of perfect controls, and show that our distance-based test detects localization for the majority of technology classes unless hidden biases induced by imperfect controls are extremely large.
    Date: 2013–01
  12. By: Keiler, Sebastian; Eder, Armin
    Abstract: This study applies a novel way of measuring, quantifying and modelling the systemic risk within the financial system. The magnitude of risk spill over effects is gauged by introducing a specific weighting scheme. This approach originally stems from spatial econometrics. The methodology allows for a decomposition of the credit spread into a systemic, systematic and idiosyncratic risk premium. We identify considerable risk spill overs due to the interconnectedness of the financial institutes in the sample. In stress tests, up to one fifth of the CDS spread changes are owing to financial contagion. These results also give an alternative explanation for the nonlinear relationship between a debtor's theoretical probability of default and the observed credit spreads - known as the credit spread puzzle. --
    Keywords: systemic risk,financial contagion,spatial econometrics,CDS spreads,government policy and regulation
    JEL: C21 G12 G18 G21
    Date: 2013
  13. By: Simone Strambach (Philipps-Universität Marburg)
    Abstract: By applying the evolutionary economic geography approach and focusing on the organizational dimension of the knowledge-based theory of the firm the paper intends to make both a conceptual and an empirical contribution to understand the ways in which knowledge dynamics unfold in time and space and lead to innovative change. The article focuses on the connections of cumulative and combinatorial knowledge dynamics at the micro level of firms and other organizations. The empirical results base on the quantitative and qualitative meta-analysis of case studies in Europe that were obtained by the instrument of innovation biographies.
    Keywords: Micro-dynamics of Knowledge, Innovation, Institution, territorial Organization
    JEL: D83 O4 O31 O32 R11
    Date: 2013–02–08
  14. By: TANAKA Ayumu
    Abstract: Using new data that tabulate the number of nights spent by visitors in each prefecture and locational Gini coefficients, this study provides the first empirical evidence that foreign travelers concentrate their visits to Japan in extremely few locations. Moreover, the concentration in travel destinations is far greater for foreign travelers than for Japanese ones, and the degree of geographic concentration varies according to their nationality. In addition, this study employs gravity equations to examine the factors that determine the number of nights that foreign visitors spend in each prefecture. Empirical results suggest that visa policy, transportation infrastructure, and natural and cultural factors along with traditional gravity variables such as distance and economic size play a role in international travel to Japanese prefectures.
    Date: 2013–02
  15. By: Jayaraman, Praveena; Gebremedhin, Tesfa G.
    Keywords: Community/Rural/Urban Development, Public Economics,
    Date: 2013–02
  16. By: Jesús Peiró-Palomino (Department of Economics, Universitat Jaume I, Castellón, Spain); Anabel Forte Deltell (Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: This article analyzes the role of different elements of social capital in economic growth for a sample of 85 European regions during the period 1995 - 2008. Much has been said about social capital in the last two decades, but studies for the European regional context are scant, and those analyzing periods after the nineties are nonexistent. The improvements in data availability allow us to consider the traditionally disregarded Central and Eastern European regions. This is especially interesting, since they are all transition economies that recently joined to the European Union and show remarkably low levels of social capital. Additionally, we follow the Bayesian paradigm, which not only allows us to make direct inference on the parameters to be estimated, but also deals with parameter uncertainty, leading to a deeper understanding of the data. Contrary to other contributions for the European context, results suggest, among other findings, that trust and social norms might have the major implications for regional growth, whereas the role of active participation in groups does not seem to be so well defined.
    Keywords: Social capital, economic growth, European regions, Bayesian inference
    JEL: C15 R10 Z13
    Date: 2013
  17. By: Mark J. Holmes (Department of Economics, Waikato University, New Zealand); Jesús Otero (Facultad de Economía, Universidad del Rosario, Colombia); Theodore Panagiotidis (Department of Economics, University of Macedonia, Greece)
    Abstract: Long-run income convergence is investigated in the US context. We employ a novel pair-wise econometric procedure based on a probabilistic definition of convergence. The time-series properties of all the possible regional income pairs are examined by means of unit root and non-cointegration tests where inference is based on the fraction of rejections. We distinguish between the cases of strong convergence, where the implied cointegrating vector is [1,-1], and weak convergence, where long-run homogeneity is relaxed. To address cross-sectional dependence, we employ a bootstrap methodology to derive the empirical distribution of the fraction of rejections. We find supporting evidence of US states sharing a common stochastic trend consistent with a definition of convergence based on long-run forecasts of state incomes being proportional rather than equal. We find that the strength of convergence between states decreases with distance and initial income disparity. Using Metropolitan Statistical Areas data, evidence for convergence is stronger.
    Keywords: Panel data, cross-section dependence, pair-wise approach, income, convergence
    JEL: C2 C3 R1 R2 R3
    Date: 2013–01
  18. By: Thomas Brenner (Philipps-Universität Marburg); Charlotte Schlump (Philipps-Universität Marburg)
    Abstract: It has been repeatedly shown that universities and public research institutes contribute to local innovation generation and facilitation. The mechanisms behind this contribution are well discussed in the literature. However, detailed empirical examinations are missing. We analyse the impact of universities and public research on regional innovation output. Thereby we analyse separately 19 technologies and distinguish whether university education and public research are rather innovation generators or innovation facilitators. All analyses are conducted on German data.
    Keywords: regional innovation systems, innovation output, university, public research
    JEL: C13 I25 O31 R12
    Date: 2013–02–08
  19. By: Andrea Bellucci (Universit… di Urbino); Alexander V. Borisov (Indiana University); Alberto Zazzaro (Universit… Politecnica delle Marche, MoFiR)
    Abstract: In this paper we explore the effects of bank-borrower physical proximity on price and non-price aspects of small business lending in local credit markets. Along the price dimension, our analysis reveals that interest rates increase with bank-borrower distance and decrease with the distance between borrower and other competing banks. Along the quantity dimension, we observe that more distant borrowers are more likely to experience binding credit limits. We also show that the quantity effects of bank-borrower distance are concentrated among less transparent firms. Our findings are consistent with pricing based on marginal costs that reflect information-based factors, and are in contrast to the established paradigm, where banks adopt spatial discriminatory pricing rules when lending to small-sized enterprises.
    Keywords: Bank lending, Credit availability, Distance, Interest rate, Pricing
    JEL: G21 G32 L11
    Date: 2013–02
  20. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Holger Graf (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Susanne Hinzmann (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: The last decades saw a pronounced shift in innovation policy in Germany and many other countries towards increased funding of cooperative R&D. Over the last years, competitions between regional initiatives pushed this trend even further by adding a regional perspective, by increasing the scope of funding, and by fostering interaction between a large number of actors. In 2008 the German ministry for education and research (BMBF) started the "Leading-Edge Cluster competition" ("Spitzencluster-Wettbewerb") in which 15 clusters were selected in three waves (2008, 2010, 2012) and are funded for a five-year period with up to 40 million Euro each. Our paper presents selected results regarding the influence of government funding on cooperation networks within five of the clusters that were successful in the first wave of the "Spitzencluster- Wettbewerb". More specifically, we analyse the extent of policy influence on the network of most important cooperation partners, its geographic reach, and the changes of network structure in general. Our empirical analysis is based on original data that was collected in 2011 with cluster actors (firms and public research) who received government funding. Our results indicate that the program was quite effective in initiating new cooperations between cluster actors and in intensifying existing linkages. The vast majority of the linkages which are influenced by the cluster competition are between actors located in the cluster region. With respect to the influence of the cluster competition on network structure, we find an increase in network centralization. Small and medium sized enterprises used the chance to connect with the local 'stars', but not as much among each other.
    Keywords: Cluster, Innovation Policy, Evaluation, Social Network Analysis
    JEL: O3 O38 L14 R1
    Date: 2013–02–04
  21. By: Zhang, Junfu (Clark University); Zhao, Zhong (Renmin University of China)
    Abstract: Rural-urban migrants in China appear to prefer nearby destination cities. To gain a better understanding of this phenomenon, we build a simple model in which migrants from rural areas choose among potential destination cities to maximize utility. The distance between a migrant's home village and destination city is explicitly included in the utility function. Using recent survey data, we first estimate an individual's expected income in each potential destination city using a semi-parametric method, controlling for potential self-selection biases. We then estimate the indirect utility function for rural- urban migrants in China based on their migration destination choices. Our baseline estimates suggest that to induce a migrant to move 10 percent further away from home, the income of this migrant has to increase by 15 percent. This elasticity varies very little with migration distance; it is slightly higher for female than male migrants; it is not affected by the migrant's age, education, or marital status. We explore possible explanations of these results and discuss their policy implications.
    Keywords: income-distance tradeoff, rural-urban migration, hukou system, China
    JEL: O15 R12 R23
    Date: 2013–01
  22. By: Liu, Sezhu; Hite, Diane
    Abstract: Green space is an important part of environment around houses. Generally, most research focused on the economic impacts of green space on urban planning and environmental pollution cost, but ignored the impact on single family home values. Limited research was conducted in this area and few studies of green space and housing prices have incorporated spatial econometric techniques. This technique is necessary since housing value may be influenced by characteristics of nearby properties. This research attempts to quantify the impacts of green space, by using the hedonic price analysis of the relationship between property values and the green space amenities around the selected single family houses in Delaware County, Ohio. Also, by incorporating spatial-lag term, we can compare the results with and without spatial effect. Eventually, after extending the model by quantile regression, the influence of different green space characteristics on housing price may change across the conditional distribution of housing price. Substantial variation was found between the results with and without spatial effects across quantiles, which indicates that luxury house buyers may value green space differently from middle or low level house buyers.
    Keywords: Hedonic model, Spatial-lag, Two-stage quantile regression, Generalized spatial two-stage least-square, Green space, Community/Rural/Urban Development, Environmental Economics and Policy, C21, R20, D10,
    Date: 2013
  23. By: Crafts, Nicholas (University of Warwick); Klein, Alexander (University of Kent)
    Abstract: This paper examines home bias in U.S. domestic trade in 1949 and 2007. We use a unique data set of 1949 carload waybill statistics produced by the Interstate Commerce Commission, and 2007 Commodity Flow Survey data. The results show that home bias was considerably smaller in 1949 than in 2007 and that home bias in 1949 was even negative for several commodities. We argue that the difference between the geographical distribution of the manufacturing activities in 1949 and that of 2007 is an important factor explaining the differences in the magnitudes of home-bias estimates in those years.
    Keywords: intra-national home bias, spatial clustering, manufacturing belt, gravity equation
    Date: 2013
  24. By: Monroe, A. Dean, Jr.; Howry, Sierra S.
    Abstract: Prospective college students use a small set of socioeconomic factors in deciding on an institution to attend. These factors are further narrowed when their regional context is sparsely populated and substitution choice is low. This study found that proximity and scholarships influence student choice of university in geographically isolated areas.
    Keywords: Service Areas, College Influence Factors, GIS, Cluster Analysis, Geographically Isolated University, Marketing,
    Date: 2013
  25. By: Nils Herger (Study Center Gerzensee)
    Abstract: Within the context of the firm location choice problem, Guimarães et al. (2003) have shown that a Poisson count regression and a conditional logit model yield identical coeffcient estimates. Yet, the corresponding interpretation differs since these discrete choice models reflect polar cases as regards the degree with which the different locations are similar. Schmidheiny and Brülhart (2011) have shown that these cases can be reconciled by adding a fixed outside option to the choice set and transforming the conditional logit into a nested logit framework. This gives rise to a dissimilarity parameter that equals 1 for the Poisson count regression (where locations are completely dissimilar) and 0 for the conditional logit model (where locations are completely similar). Though intermediate values are possible, the nested logit framework does not permit the dissimilarity parameter to be pinned down. We show that, with panel data and adopting a choice consistent normalisation, the fixed outside option can also be introduced into the Poisson count framework, from which the estimation of the dissimilarity parameter is relatively straightforward. The different location choice models are illustrated with an empirical application using cross-border acquisitions data.
    Date: 2013–02
  26. By: González-Val, Rafael; Ramos, Arturo; Sanz, Fernando; Vera-Cabello, María
    Abstract: This paper analyses in detail the features offered by three distributions used in urban economics to describe city size distributions: lognormal, q-exponential and double Pareto lognormal, and another one of use in other areas of economics: the log-logistic. We use a large database which covers all cities with no size restriction in the US, Spain and Italy from 1900 until 2010, and, in addition, the last available year for the rest of the countries of the OECD. We estimate the previous four density functions by maximum likelihood. To check the goodness of the fit in all periods and for the thirty-four countries we use the Kolmogorov-Smirnov and Cramér-von Mises tests, and compute the Akaike Information Criterion (AIC) and the Bayesian Information Criterion (BIC). The results show that the distribution which best fits the data in most of the cases (86.76%) is the double Pareto lognormal.
    Keywords: city size distribution; double Pareto lognormal; log-logistic; q-exponential; lognormal
    JEL: C16 C13 R00
    Date: 2013–02–09
  27. By: Jeffrey Grogger; Gordon H. Hanson
    Abstract: We use data from the NSF Survey of Earned Doctorates to examine the post-degree location choices of foreign-born students receiving PhDs from US universities in science and engineering. Over the period 1960 to 2008, 77% of foreign-born S&E PhDs state that they plan to stay in the United States. The foreign students more likely to stay in the US are those with stronger academic ability, measured in terms of parental educational attainment and the student’s success in obtaining graduate fellowships. Foreign students staying in the United States thus appear to be positively selected in terms of academic ability. We also find that foreign students are more likely to stay in the United States if in recent years the US economy has had strong GDP growth or the birth country of the foreign student has had weak GDP growth. Foreign students are less likely to remain in the US if they are from countries with higher average income levels or that have recently democratized. Education and innovation may therefore be part of a virtuous cycle in which education enhances prospects for innovation in low-income countries and innovation makes residing in these countries more attractive for scientists and engineers.
    JEL: J24 J61
    Date: 2013–02
  28. By: Benner, Maximilian
    Abstract: After it has been discovered as a vehicle of economic policy in industrialized countries at the beginning of the 1990s, cluster policy has attracted the attention of development policy. Indeed, the case for using cluster policies to promote economic development is in principle not confined to the context of industrialized countries. As cluster policies necessarily have to be specifically tailored to each individual case, it should come as no surprise that their use in developing countries will always differ from their use in industrialized ones. Surely, individual cluster policies in developing contries, too, will differ from each other. Still, some general approaches that respond to typical framework conditions in developing countries can be discerned. This article elaborates some of them and suggests ways to promote clusters on the regional and local levels in developing countries.
    Keywords: clusters; cluster policy; regional policy; development policy; development cooperation
    JEL: R58 O25 O10 O20
    Date: 2013
  29. By: Xu, Wan; Khachatryan, Hayk
    Abstract: The relationship between U.S. nursery industry sales and seven major Integrated Pest Management (IPM) practices was investigated using smooth transition spatial autoregressive models. Controlling for selected production, management, and marketing practices, the results showed that the differential effects of IPM practices on annual sales vary across geography, which has useful implications for industry practitioners.
    Keywords: nursery industry, integrated pest management, spatial autoregressive model, Agribusiness, Q160,
    Date: 2013
  30. By: Li, Shu; Thurman, Walter N.
    Abstract: This paper analyzes the effects of waterway transportation costs on the spatial distribution of corn prices at U.S. grain markets. Interregional trade theory predicts that in a competitive market price differences between markets are explained by transportation cost. The precise role played by transportation costs can depend on distances that grain needs to travel and also on the extent to which markets are integrated into the transportation system. The Mississippi waterway consists of an efficient barge transportation system that links the Midwest to the largest grain export market, the Gulf of Mexico. In markets with export to the Gulf, we predict that: (1) the magnitude of price differences between two markets increases with an exogenous increase in barge rates; (2) the response of prices to barge rate changes for markets on the river is greater the farther north, or upstream, the market is; (3) the magnitude of the barge-rate effect on prices declines with distance from the market to the river; (4) the barge-rate effect is less pronounced in markets that are less integrated into the river system. We develop theory-based predictions along these lines. We test the predictions and measure the associated effects with a mixture of parametric and nonparametric methods applied to a rich panel data set of corn prices from over one thousand locations.
    Keywords: Transport, Spatial Basis, Corn Prices, Mississippi River, Agribusiness, Crop Production/Industries, Demand and Price Analysis,
    Date: 2013
  31. By: Matthew S. Jaremski
    Abstract: The passage of the National Banking Acts stabilized the existing financial system and encouraged the entry of 729 banks between 1863 and 1866. The national banks not only attracted more deposits than previous state banks, but also concentrated in the area that would eventually become the Manufacturing Belt. Using a new bank census, the paper shows that these changes to the financial system were a major determinant of the geographic distribution of manufacturing. The sudden entry not only resulted in more manufacturing capital and output at the county-level, but also more steam engines and value added at the establishment-level.
    JEL: G21 N21 O43
    Date: 2013–02
  32. By: Jose-Luis Hervas-Oliver; Jose Albors-Garrigos
    Abstract: The economic geography literature assumes that large leading firms (technology gatekeepers) (TGs) with high absorptive capacity and high-intensity R&D expenditures, shape the district learning process. However, there is an absence in the literature of a dynamic analysis of the role of the TG. Instead, most of the evidence provided is set at a single point in time and considers only one stage of the cluster life cycle (CLC). This paper challenges the aforementioned assumption, and introduces into the discussion two important influences on outcomes: the type of knowledge created (whether it be disruptive or not) in the cluster by technology gatekeepers, and the stage of the cluster life cycle (CLC) at which that knowledge is created. This work addresses the roles of the TG and the CLC together, responding to the gap that not much is known about the role and the persistence of the TG dynamically across different stages of the cluster life cycle. Using qualitative longitudinal case-study research, a world-class cluster is analysed over the last eighteen years. The results show that there are temporary technological gatekeepers across cluster life cycles which assume the (temporary) role of leaders when it is a question of bringing in disruptive knowledge. The study’s findings have important implications for scholars and policymakers.
    Date: 2013
  33. By: Luca Berchicci; Jeroen P.J. de Jong; Mark Freel
    Abstract: It is generally recognized that firms’ innovative performance can be enhanced by collaborating with remote partners. However, remote collaborations are not without challenges, as geographical distance may frustrate tacit knowledge transfer and inter-organizational learning. We investigate the moderating role of absorptive capacity by proposing that the higher firms’ R&D intensity, the stronger the relationship between remote collaboration and their share of new product revenues. Drawing on survey data of 250 Dutch high-tech small firms, it is confirmed that remote collaboration is associated with innovative performance, but at low values of R&D intensity this relationship disappears.
    Date: 2013
  34. By: Elisabeth Christen (WIFO)
    Abstract: Using distance and time zone differences as a measure for coordination costs between service suppliers and consumers, we employ a Hausman-Taylor model for services trade by foreign affiliates. Given the need for proximity in the provision of services, factors like distance place a higher cost burden on the delivery of services in foreign markets. In addition, differences in time zones add significantly to the cost of doing business abroad. Decomposing the impact of distance into a longitudinal and latitudinal component and accounting for differences in time zones, it is possible to identify in detail the factors driving the impact of increasing coordination costs on the delivery of services through foreign affiliates. Working with a bilateral US data set on foreign affiliate sales in services this paper examines the impact of time zone differences and East-West and North-South distance on US outward affiliate sales. Both distance as well as time zone differences have a significant positive effect on foreign affiliate sales. By decomposing the effect of distance our results show that increasing East-West or North-South distance by 100 kilometers raises affiliate sales by 2 percent. Finally, focusing on time zone differences our findings suggest that affiliate sales increase the more time zones we have to overcome.
    Date: 2013–02–08
  35. By: Stijn Claessens; Neeltje van Horen
    Abstract: This paper provides a critical assessment of the costs and benefits of foreign bank ownership. It reviews the extensive literature on the impact of foreign banks and uses a unique database on bank ownership, covering 129 countries, to (re-)examine a number of the issues discussed. It documents (changes in) foreign bank presence between 1995 and 2009, highlighting important differences across host and home countries and strong bilateral patterns. It finds that foreign banks tend to outperform domestic banks in developing countries, countries with weak institutions and where foreign banks do not play a major role. In addition, being from a geographically close home country increases the profitability of foreign banks. In terms of impact, it shows that foreign banks can deter domestic financial sector development in developing countries, countries with weak institutions and where foreign banks play a minor role. Examining the impact of foreign banks on financial stability, it finds that during the global crisis, foreign banks reduced credit more compared to domestic banks in countries where they had a small role, but not when dominant or funded locally. These findings show that, when analyzing the impact of foreign bank presence accounting for heterogeneity, including bilateral ownership, is crucial.
    Keywords: foreign direct investment; international banking; distance
    JEL: F21 F23 G21
    Date: 2013–02
  36. By: Klaus Schöler
    Abstract: For a long period the models of spatial pricing were developed and connected with the famous names of Wilhelm Launhardt und August Lösch. These approaches take the spatial dimension of pricing into account in partial analytical models. This publication discusses monopoly, monopolistic competition, and international trade. The reader will get a greater insight into the basic models and more complex structures.
    Keywords: spatial pricing, spatial discriminatory pricing, spatial monopoly, international spatial trade
    Date: 2013–01
  37. By: Brown, W. Mark<br /> Rigby, David
    Abstract: Il existe de nombreuses preuves qu'un grand nombre d'entreprises se regroupent au niveau spatial et qu'il y a une association entre la formation de grappes et la productivite. Au lieu de determiner les vastes effets de la formation de grappes, le present document explore comment les differents types d'entreprises profitent de l'agglomeration. Il fait progresser la recherche sur l'agglomeration en demontrant tout d'abord que les entreprises ne profitent pas au meme degre de la colocalisation et, en deuxieme lieu, que les entreprises ayant des capacites internes differentes profitent de formes differentes d'externalites geographiques. L'analyse empirique est axee sur les etablissements du secteur canadien de la fabrication qui etaient en activite au cours de la periode allant de 1989 a 1999.
    Keywords: Fabrication, Rendement des entreprises et appartenance, Comptes economiques, Propriete des entreprises, Comptes de la productivite
    Date: 2013–02–06

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